A new ruling by the Library of Congress' Copyright Office will let iPhone owners legally download and run apps from sources other than Apple's App Store. The Electronic Frontier Foundation said that the practice, known as "jailbreaking," already has been carried out by more than 1 million iPhone owners in violation of the Digital Millennium Copyright Act (DMCA), either to change wireless providers or use unauthorized apps. In its ruling, the Copyright Office rejected Apple's claim that the practice was prohibited by current copyright laws.
http://www.eff.org/press/archives/2010/07/26
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